Gold Ends Marginally Higher On Data; Sheds 0.5% For Week

12/14/2012 2:05 PM ET

Gold futures ended modestly higher Friday, after a huge sell-off yesterday, as the dollar turned lower against a basket of major currencies. The precious metal also found support with some upbeat manufacturing activity in China which expanded at the fastest pace in 14 months in December and a more than expected rise in U.S. industrial production. Nevertheless, uncertainty over U.S. debt negotiations was a dampener on gold as negotiations between the White House and Republicans showed no signs of a thaw.

Gold for February delivery, the most actively traded contract, edged up $0.20 or 0.01 percent to close at $1,697.00 an ounce Friday on the Comex division of the New York Mercantile Exchange.

Gold for February delivery scaled an intraday high of $1,701.90 and a low of $1694.00 an ounce.

For the week, gold shed 0.5 percent.

Yesterday, gold settled near a two-week low mostly on profit taking as the precious metal erased gains made Wednesday after the U.S. Federal Reserve announced a new additional bond purchase program. Meanwhile, uncertainty over U.S. debt negotiations continued even as the fiscal cliff looms around the corner that would include automatic tax hikes and spending cuts beginning January.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 79.55 on Friday, down from 79.93 in North American trade late Thursday. The dollar scaled a high of 79.98 intraday and a low of 79.50.

The euro traded higher against the dollar at $1.3166 on Friday, as compared to $1.3077 late Thursday in North America. The euro scaled a high of $1.3173 intraday and a low of $1.3068.

In economic news from the U.S., the Labor Department said its consumer price index fell by 0.3 percent in November following a 0.1 percent increase in October. Economists had been expecting prices to edge down by 0.2 percent. Excluding the steep drop in energy prices as well as a modest increase in food prices, the core consumer price index inched up 0.1 percent in November after rising by 0.2 percent in October. Core prices had been expected to increase by 0.2 percent.

Industrial production in the U.S. increased by much more than anticipated in November, a Federal Reserve report said Friday. The increase reflects a recovery in production for industries that were negatively affected by Hurricane Sandy, with industrial production surging up 1.1 percent in November after falling by a downwardly revised 0.7 percent in October. Economists expected production to increase by 0.3 percent compared to the 0.4 percent drop originally reported for the previous month.

China's manufacturing activity expanded at the fastest pace in 14 months in December amid a build-up in new orders, preliminary results of a survey by Markit Economics revealed Friday. The headline HSBC/Markit purchasing managers' index rose to 50.9 in December from 50.5 in November, the highest reading in 14 months. A PMI reading above 50 indicates expansion of the sector, while a reading below 50 suggests contraction.

Elsewhere, eurozone inflation slowed as estimated to 2.2 percent in November from 2.5 percent in October, final data from Eurostat showed. On a monthly basis, prices fell 0.2 percent. The decrease largely reflects slowdown in energy price growth to 5.7 percent annually from 8 percent.

Survey results from Markit Economics showed eurozone private sector to have contracted at a slower pace as Germany recovered at the end of the year. The composite Purchasing Managers' Index rose to a nine-month high of 47.3 in December, from 46.5 in November.

Germany's private sector expanded in December after contracting for eight straight months, underpinned by service sector recovery, Markit Economics said. The flash composite output index came in at 50.5 in December, an improvement on the 49.2 recorded in November.